Big Tech lifts the S&P 500 and Nasdaq
A rebound for some influential Big Tech stocks lifted the US market on Tuesday despite a drop for Apple and mixed trading elsewhere on Wall Street.
The S&P 500 rose 0.4%, even though most of the stocks within the index fell. The Dow Jones Industrial Average dropped 197 points, or 0.4%, and the Nasdaq composite climbed 0.8%.
The stock market has been shaky recently as technology and artificial-intelligence stocks swing on worries their prices shot too high in the frenzy around AI. Several of the most influential AI-related stocks were firmer on Tuesday, which supported the market, after flipping from gains in the morning to losses in the afternoon a day earlier.
Nvidia rose 2.3% and was the strongest force pushing upward on the S&P 500. Close behind was another chip company, Broadcom, which rose 3.1%. Also boosting the market were several companies that are spending heavily on AI. Microsoft, Amazon and Meta Platforms all rose more than 2%.
Apple hit by higher memory-chip costs
Apple was long seen on Wall Street as a Big Tech company that's less dependent on AI. But it's still feeling the effects of the AI boom.
Memory chips for computers have become more expensive because of the demand created by the rush to build AI data centres. Those higher costs are hitting Apple, which said it expects to make less profit from each $US1 of its revenue during the final three months of this year.
That helped send Apple's stock down 1.9%, even though the seller of iPhones and Mac computers reported stronger profit and revenue for the latest quarter than analysts expected.
Palantir Technologies fell 1.6% even though it likewise reported a better profit than expected. The software company said it made more money working with US companies than from the US government for the first time, as US commercial revenue soared 148% from a year earlier.
Midterm elections in focus
The market's moves came as voters cast their ballots in Tuesday's US midterm elections, where the rising cost of living and AI were issues that crossed party lines.
History suggests such elections may not matter much for the broad market. Going back to 1970, the S&P 500 has had a positive return every time in the six months following a midterm election, according to Brock Weimer, an analyst at Edward Jones.
Some on Wall Street speculate that a Democratic sweep of Congress this time around could lead to more regulations and restrictions on AI development. But Donald Trump would still be president and have the power to veto. And Wall Street generally prefers split control of Washington, which it sees as offering less risk of transformative policies that could reshape the economy.
All told, the S&P 500 rose 27.52 points to 7,568.92. The Dow Jones Industrial Average dropped 197.26 to 51,786.72, and the Nasdaq composite climbed 207.65 to 25,372.01.
Jobs report pushes Treasury yields higher
Expectations are high for all kinds of companies to continue to deliver big gains in profits as the US economy keeps chugging along, even with high inflation and elevated interest rates. That helped send the S&P 500 to a record high last month.
An encouraging report on the US job market said on Tuesday that employers were advertising more job openings at the end of September than economists expected. That helped push the yield on the 10-year Treasury up to 4.96% from 4.91% late Monday.
Oil swings amid Iran war uncertainty
In the oil market, prices continued to swing. Brent crude climbed above $US107 per barrel overnight before briefly dropping below $US101 in the morning amid continued uncertainty about what will happen in the war with Iran. It settled at $US103.60, down 1.1% from Monday.
Global markets mixed
On global markets, indices fell in Europe following a mixed finish in Asia. South Korea's Kospi dropped 3.6% for one of the world's sharpest moves due to losses for its two tech giants, Samsung Electronics and SK Hynix.
Stocks rose 0.3% in Australia after the RBA raised its benchmark interest rate for the fifth time this year.
